On Feb. 16, International Business Machines Corp. (NYSE:IBM) and Visa Inc (NYSE:V) announced a partnership to bring the point of sale to connected devices including cars. The companies plan to allow to embed payments and commerce into any device – from a watch to a ring, an appliance or a car – connected to the Internet of Things (IoT).
Under the collaboration, IBM will combine its Watson IoT platform and cognitive capabilities with Visa’s global payments services to allow people make payments on any connected device.
Watson IoT platform allows businesses to connect to connected devices, sensors, and systems and draw actionable insights. The platform is currently used by more than 6,000 IBM clients. More than 3 billion consumers around the world use Visa’s global payments services.
“Under this collaboration, companies can infuse secure payments across their entire product lines using the Visa Token Service, a new security technology that replaces sensitive payment account information found on payment cards with a unique digital identifier, via IBM’s Watson IoT platform,” IBM said in a statement.
As a result, IBM and Visa can support payments and commerce on many of 20 billion connected devices estimated to be in the global economy by 2020.
“IoT is literally changing the world around us, whether it’s allowing businesses to achieve unimaginable levels of efficiency or enabling a washing machine to ensure we never run out of detergent.,” stated Harriet Green, general manager, IBM Watson IoT.
It is estimated that there will be 380 million connected cars by 2021.
“As the car ecosystem connects to the Watson IoT Platform, a driver would be alerted when the car’s warranty or certification is about to expire or if specific car parts need replacing. With this information, the driver can order parts with the push of a button, or schedule a service appointment at their preferred local garage. The driver could even pay for gas through a direct interaction between the car and the gas pump,” IBM said.
Similarly, an enthusiastic runner with a fitness device – it might be a fitness band or a smartwatch like Apple Watch – could receive a digital alert when it is time to replace running shoes, including a recommendation of the best model, at the best price, from a preferred retailer.
“The Internet of Things is not only driving a more connected world, it’s changing the way we live, shop and pay, by moving data and the point-of-sale to wherever the consumer wants it to be,” said Jim McCarthy, executive vice president, innovation and strategic partnerships at Visa.
McCarthy added, “With the power of Watson’s cognitive technologies and IBM’s leadership in IoT and security, they are the ideal partner to help us deliver secure payments to ‘virtually anywhere’ and on the enormous scale of the IoT.”
As part of the partnership, all of IBM’s Watson IoT Platform customers will get an access to Visa payment services via the IBM Cloud so they can build personalized commerce experiences and proactively make recommendations based on consumers’ unique needs.
IBM said that both companies will also make sure that all consumer data remains secure by leveraging Visa’s Token Service, which replaces sensitive account information found on payment cards with a unique digital identifier that can be used to process payments without exposing actual account details. The Visa Token Service is accessible through a network of token service providers (TSPs) as part of the Visa Ready partnership program.
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